We cover roughly 28 companies, and Hain is our top pick. So we think it has the most upside from a stock perspective and also from a company perspective just in terms of the underlying growth in the industry. And I think Hain is just really well positioned here. And it's not completely in favor, it's a little bit out of favor relatively so that really makes it attractive when you have good fundamentals and it's not priced to perfection like some other high-growth operators that we know.

And Irwin Simon, CEO, has also brought Rob Burnett, the head of the European operations. And obviously, Hain has moved pretty aggressively into Europe. We also have Mary Anthes, the Head of Investor Relations. So Irwin's going to talk for me like 10 or 15 minutes, and then we'll just go into Q&A. Feel free to ask questions as we go along here.

Irwin David Simon

Thank you, Greg, and good afternoon. And I didn't know we were out of favor. I hope we're always in favor because eating healthy is not a fad, not a trend and it's going to be a favorable part of everybody's life. As you come back and look today, 70% of health care costs come from self-infliction and what we eat. And if you come back and look, and I look at Trish [ph] right in front of me and I'm pretty impressed, Trish [ph], eating a nice, big green salad. And I hope everybody's eating their Veggie Straws instead of Miss Vickie's fried potato chips.

So I think as you look at trends and you look at opportunities and you look at growth, Hain is very much in favor. And a company that's been started 20 years ago by myself, and back then when I would talk about healthy foods, people thought I was crazy, people who would rather eat the box than a lot of the products because of the taste. And boy, how things have changed in 20 years.

And if you look at our brands today and 20 years from today when I'm standing up here and put these brands up, you will see brands that are $0.5 billion in size, $1 billion in size. And just to name a few, Earth's Best, when we bought it in 1999, was a $40 million brand, close to a $200 million brand and putting it together with Ella's in our most recent acquisition, how we create healthy infant, toddler business from a scale and size and how we plan to roll out those internationally. And if you look at our objective is to build global brands around the world. So whether it's the U.S., U.K., Canada, Europe, Asia, India to buy Celestial Seasonings tea, to buy Terra Chips, to buy Ella's, to buy Hartley's jam, to buy Sun-Pat peanut butter, Gale's honey, to buy Yves vegetarian, so the objective is to build global brands around the world.

We have 10 brands today that do well over $100 million plus. We have 5 or 6 that have $50 million plus. And how do we turn those into $200 million, $300 million brands? And that is going to grow through distribution. If you look at our business model and right now, about 60% of our business is done within the U.S. And the U.S. today is about $1.1 billion in size. And how do we double our U.S. business is we have about a 35% ACV. If you take our top 50 items and take that to a 50% ACV, it's worth $250 million of retail. So growing 9% to 11% organically and adding $100 million a year doubles the U.S. business. 18 months ago, we did our first acquisition in the U.K. We were a GBP 50 million business in the U.K. And today, we're about a $600 million business, about a GBP 450 million business. And the objective is how do we take that to $1 billion in size. And Rob will take you through some of that.

So as you look at Hain's business, how do we double it from a $2-plus million business from today over the next 5 years? It's growing at 9% to 11% and doing $100 million acquisitions and we have the ability to do a lot more. So I would like to see 50% of our business within the U.S., 50% of our business with outside the U.S. and the growth opportunity is definitely out there.

Key brands. You heard me talk about Earth's Best. And if you really come back, and Celestial Seasonings has been around since 1970. This brand grew double-digits this year. And during some of the breakouts and one-on-ones, yes, because of the cold weather and the flu season, that let me tell you, I'll take the credit when that is there because at the same time, I still have to sell if it's a warmer winter. But we've innovated it into Wellness Teas, more herbal teas, Celestial Seasonings shots, Kombucha, we've really taken that brand and innovated. Sensible Portions, we bought that 3 years ago this May. That was a $56 million business, and we've taken it into a $125 million business. And what have we done? Yes, it's a big part of that is Club Stores, but we've grown distribution and grocery. We've grown distribution and up and down the street business. 3 years ago, Greek Gods. And Hain has been ahead of itself. Greek yogurt, we didn't hear Greek yogurt. The only thing we heard was a crisis in Greece. And today, our Greek Gods yogurt business is a $100 million business. And we've jumped into it first, and Greek yogurt with its kefirs. And we have a 32% share in the Greek yogurt category and our 24-ounce has been the big grower for us in real premium Greek yogurt, and it's been a great business.

Juicing. It's all we're hearing about juicing. And this is not juicing in the way that we've heard it before, but in regards to good healthy juices today that are replacing other juices, whether it's Walnut or Naked Juices and pasteurized. BluePrint, we acquired it in December, approximately $20 million business. And just with growth within Whole Foods direct-to-home from specialty stores, that business will double and continue and the consumer really wants healthier juices. Our Personal Care business continues to be a big part of our growth. And again, if you're concerned of what you eat, what you put on your body, what suntan lotions will be some big opportunities for us. So there's some of the brands. And then the acquisitions we just really recently did with Hartley's, with Sun-Pat peanut butter, with Ella's, which is an exciting acquisition for us. So big opportunities there.

In the U.K., and as I said we have Rob here, within 18 months, we are within the top 40 consumer packaged goods companies in the U.K. So what do we have? We have #1 brands in about 6 categories today. We have real state-of-the-art manufacturing capacity. We are a big supplier to a lot of the major retailers and we have excellent relationships with a lot of the retailers within the U.K. and we can leverage a lot of the brands. So also if we come back to U.K., we have what suits you for breakfast snacking, lunch and dinner. And I brag a lot when you walk into a Whole Foods and you walk down a lot of different aisles and depending what region, it could be 1,500 to 2,000 SKUs that we have within a Whole Foods today. You walk into a Tesco, a Sainsbury's or a Waitrose today and it's very impressive how many brands of SKUs that we have in a supermarket within the U.K. today and the expansion and the opportunities that we have there.

The numbers speak for itself. If you come back and look at our sales growth in our CAGR, over the last 3 years, 24.5% or 24% growth. If you look at our GAAP earnings, 58.3% and you look at EPS adjusted, 28.3%. So we've had great growth among earnings, great growth among our margins, great growth among our sales, and it's what we continue to do. So why Hain and why I disagree with Greg about we're a little out of favor, and I'm not sure that's not what he meant. But our brand portfolio is well positioned for growth. We're in a great category. Health and wellness is not going away. Eating healthy, as I said before, not a fad, not a trend. And just come back and think of allergens, BPA, gluten-free, lower sodium, healthier foods for kids. What's happened with meals in regards to schools? What happens in regards to obesity among kids today?

So we're there. We have the brands. One of the biggest changes that's going to happen within the food industry is GMO-free foods, foods that are genetically -- that are free from genetically modified ingredients. 98% of Hain's products are GMO-free. So in 5 years, I mean, if we could have all our products GMO-verified, we could put that on the label and be within Whole Foods today, so we're already there.

We really have a diversified portfolio geographically, 60% U.S., 40% international. The objective is to get that to 50-50. And between Canada, Asia, U.K., rest of Europe and South America, we can get there. The U.K., which is one of our biggest growth opportunity, is really poised for growth. And laying the foundation over the last 18 months in the brands, the infrastructure that we have in place today and now getting the productivity savings and the organic growth, we're ready to do that. And just bullish on the U.S., our consumption trends have been strong. If you look at 24-month comps, we're running in the 25% levels. If you look at 12 weeks, we're running about 8.5%, so comps have been strong. We, this past year, introduced over 100 new products on innovation, over 146 products in the U.K., so we're strong on innovating. And that's a key to Hain is innovation of new products.

John Carroll has talked about distribution whitespace and the opportunities there. And what you've heard me say before is just getting our distribution up to 50% and what's that worth for us. Since last July, we did over $400 million of exciting acquisitions. We're still early in integrating them, getting the synergies, the savings and the accretion and the growth, so there is tremendous opportunities just with the acquisitions that we've done, not with the acquisition opportunities that are out there.

And last but not least, we're talking about productivity. And Jim Meiers and the operations team talked about it in the U.S. about $25 million in productivity savings. Our whole team worldwide will be getting together in the next month, and we're looking for $40 million to $50 million in productivity savings. But the big thing is not only productivity savings. One of the big challenge facing natural organic today is supply. And having a global supply team, a global productivity team, a global sourcing team will allow us to go out there and source on a global basis. But we're not going to have that as stocks and we will be able to supply products all around the world.

So it is an exciting time for Hain. And it's an exciting time for the category. It's an exciting time for our brands, our people, our strategy and the opportunity to sell healthy food around the world and healthy personal care products.

Question-and-Answer Session

Gregory R. Badishkanian - Citigroup Inc, Research Division

Thanks, Irwin. That was great. Since we have Rob here, and we don't often have the opportunity to speak to Rob, maybe just if you could kind of give us a sense of how the organic food industry is growing in the U.K. and where you see that over the course of the year.

Rob Burnett

Yes, no problem. I think there's quite a big difference between organic in the U.K. and the U.S. Organic has not really the same level of acceptance in the U.K. it has here. It's more natural in the U.K. and healthy has certainly -- health and wellness is a bigger trend in the U.K. as it is in the U.S. but not necessarily organic. It's much more towards natural. I think one of the key differences between food in the U.K. and the U.S. is that over 50% of all food sold in the U.K. is fresh or chilled. So there's a much higher preponderance of fresh and refrigerated food. And similarly, over 50% of all food in the U.K. is private label. And the private label element is really driven by that fresh statistic because a lot of the key retailers in the U.K. have pioneered some private label categories. So health and wellness, certainly a key trend. Gluten-free, which is big in the U.K. and growing at 25%, 30% CAGR for the last 3 years, will continue to grow at those rates. A lot of similarities between health and wellness and the key concerns of obesity and lower sodium, less sugar, no trans fat. Of course, in the U.K. and Europe, there is no GMO. There's no need to have GMO labeling because GMO is not allowed in the U.K. and Europe. It's not available. So that's a key difference between here and there. So you have very similar global trends in terms of health and wellness but not the same focus on organic.

Gregory R. Badishkanian - Citigroup Inc, Research Division

And what's the opportunity for Hain in the U.K., whether it's maybe getting soups into Tesco or some other bigger customers and kind of leveraging the other global -- the Hain global brands?

Rob Burnett

Yes. I think there's a big opportunity in the U.K. Some of our -- and Irwin has been in some of the meetings with our biggest customers. They recognize in terms of health and wellness products that the U.K. is a little bit behind the U.S., and they recognize that Hain is a leader here. And they've actually asked us to come in and help them on certain things, particularly on kid's nutrition and infant nutrition. And of course, Ella's is a great, new acquisition for the group. But they're looking to the U.S. for wider inspiration on added value because in the U.K., a lot of the, as I mentioned, organic or natural tends to be produce-led, not much added value. So they are looking for us and the parent here in the U.S. to move those categories on a little bit further. We've spent the last 18 months doing a lot of strategic moves in the U.K. We've had 4 acquisitions, 2 divestitures, we built 2 factories. We've completely reorganized the U.K. team from a functional organization to a product and line organization. And we're really now in a position where we are built for significant growth. We have 3 platforms in the U.K. our grocery platform, our branded refrigerated and the private label refrigerated and frozen. You mentioned Tesco. One area in the U.K. that's hurt us in the last year has been soup. New Covent Gardens is one of our most important brands. Last fall, we failed to reach agreement with Tesco on a deal. I think it's good to announce that we're back in for next year. We've agreed with Tesco a multiyear deal. They've recognized that it was bad for them and certainly, it was bad for us. But their position in the category has [indiscernible] up. And there, you'll see a joint statement from the both of us coming out soon, where they're really looking to get behind the brand to reassert their position in fresh soup, so that's really important. Yesterday, you may be heard me on the webcast talk about Project Castle [ph]. And yesterday, we started shipping from Project Castle [ph] for the first time. This is a new factory that we're building within an old Hain site. We launched yesterday, but we've got a range of progressive launches up until February 2014. And at February 2014, we'll have about $50 million of new revenue for this business, which is in a new category. I think this is an important point. Our largest customer made a call to us 2 years ago and said, "We've got a problem in this category. Would you come in and help us?" We weren't in the category. We've never made the products before, but we've got a good reputation of innovation, and they asked us to come in. And now less than 2 years later we've entered the category, we'll have $50 million of new revenue from February. And it's a good indication of how we have positioned in terms of innovation.

Gregory R. Badishkanian - Citigroup Inc, Research Division

Yes. Nice. And if you kind of think about -- I know you have a lot of -- you have integration where you're going to cut SKUs and businesses that maybe were not profitable. And if you exclude that, what do you think over the next 2 years what your organic growth rate is going to be? Or if you want to look at maybe what you think your sell-through rate is going to be?

Rob Burnett

Yes. Well, I think we've got -- I mean, these things I just talked about, I'm not even talking about the new product development opportunities. We bought -- our largest acquisition in the U.K. has been the Premier spreads and jelly business in October of last year, GBP 160 million business. 5 brands, 4 of them market leaders, 1 of them second in the category. And that business has had no investment, no product development, no innovation for a decade. And they're still brand leaders. So you'll start to see from now and in the fall a whole range of new healthier opportunities coming from that business, whether it be reduced sugar jam, no sugar jam, one of fruit portion jelly. Some parts, where we're brand leaders in the U.K. in peanut butter, we have a 28% share. But the U.K. is miles behind the U.S. in nut butters. I mean, we only really have peanut butter. And we've been working with MaraNatha here in the U.S. So in the fall, we'll be launching cashew butter, hazelnut, chocolate peanut and a whole range of added value that's just not in the U.K. yet. So we've got multilevel layers of growth opportunities. First, we've got some brands that have been really neglected by previous owners, I think, with a lot of growth opportunity. They've got a lot of organic NPD in these categories. We, of course, got the opportunity to bring some of the U.S. brands into the U.K. We started with Greek Gods, which is rolling out nationally in July. And the next thing after that in the fall, we'll be bringing gluten-free coffee from the U.S. into the U.K. So we've got various different opportunities across organic growth.

Gregory R. Badishkanian - Citigroup Inc, Research Division

Good. In talking about growth in the United States, the sell-through -- or ACNielsen was a little bit volatile at one point. But it's always been in that high single-digit, very strong growth. Some people always get nervous if it moderates 100 or 200 basis points. But I mean -- and where do you see that going over the next year or 2? Is it going to stay in that high single-digit, do you think?

Irwin David Simon

So just step back. The U.K., just as Rob said, high single, low double-digit is something that we should expect, and that's coming from our branded products. That's coming from innovation within our branded products, just new distribution, brands that have not grown. And don't forget, the U.K. consumption is not growing in the U.K. And a lot different in the U.K., there's 4 retailers basically or 5 retailers, and that's where 90% of your consumption comes from. And that's why 18 months ago, I kind of laid the gamut down to really grow within the U.K. because we saw the opportunity to the wellness going there. In regards to obesity, the U.K. is the third country in the world that has one of the biggest problems as far as gluten-free. So U.K. retailers are asking for our help there. And we're well situated with brands, people, manufacturing, infrastructure, big opportunity. And U.K. will be our launching pad for some big opportunities throughout the rest of Europe. In regards to the U.S., Greg, the AOC numbers or Nielsen again only represent 55% of sales. It does not include Whole Foods, it does not include Amazon, Costco, independent naturals but does include Walmart, which is a big customer of ours and a big growth opportunity for us. In the last Nielsen numbers that came out, we're overlapping a 16% comp. And in that last number, if you look at a 24-month stack rate, we're up 25%. If you look at 12 weeks, we're up 8.5% and a couple of things. We were overlapping some Rosetto and Ethnic Gourmet, which was 1 point. And there was some promotional activity, which we tried in Earth's Best, which we saw some great results. We pulled some of it back and we see it work. So listen, I think with a lot of new distribution coming up in Walmart and Target, new distribution coming up at grocery, you should see high single-digit continual consumption growth. But again, the big opportunity is what's happening with AmazonFresh, what's happening with Whole Foods, opening up their stores and their growth, what's happening with Costco, where we have 10 items today. So health and wellness is the big opportunity here in what I said in my early remarks in genetically modified ingredients. We are 98% there today, could get to 100% very easily, it's the GMO-verified. And that will be the single biggest change within food over the next couple of years. And Whole Foods has sort of laid the -- has not sort of -- has laid the foundation for that.

Gregory R. Badishkanian - Citigroup Inc, Research Division

And would that mean other states like California at some point from a labeling perspective? Or is that what you're...

Irwin David Simon

I don't think -- well, Whole Foods, number one, to sell within their stores are going to have to have foods that are genetically modified that are free of GMOs or you won't be able to sell. But I think there's Washington, there's New Mexico, there's 3 or 4 states right now that are mandating that. And forget states mandating, you guys that are out there in the audience today, consumers, again if you go back and look in the U.K. or Europe, they don't sell food that contains genetically modified ingredients. They don't have the allergen issues. They don't have the issues that come from food that we have here in the U.S., so there's got to be some reason why we have all those issues.

Gregory R. Badishkanian - Citigroup Inc, Research Division

I agree. Kind of looking at -- if you go back over the last -- I mean, I've been covering you for, I guess, 18 years. And it's been a long time. You, either. And since -- I mean, you started the company when it was 0. Maybe your first business was $10 million or $20 million in sales, is that...

Irwin David Simon

$2 million.

Gregory R. Badishkanian - Citigroup Inc, Research Division

$2 million. Okay. And you grew it into the largest business in the organic foods industry. And along the way, you've always had strong growth. But it wasn't up until the last several years that you had -- you were able to manage costs, cut costs and get more consistency of earnings so that you didn't have this volatility from an execution perspective. So I mean, what's really led to that?

Irwin David Simon

So I think if anything scale. And again, I come back today, how do we get better margins? How do we get better efficiencies? How do we get much more scale with retailers is walking in there and having respectable brands, respectable infrastructure to support it. And you heard what I said in my remarks. We're looking for $40 million to $50 million of productivity out there, and that's because of a $2 billion company. You couldn't look for that if you were a $400 million, $500 million company. One of the big things this year and UNFI mentioned on their conference call, that the stocks, we couldn't keep up with demand with certain ingredients. But we are sourcing all over the world today for natural and organic ingredients. We are in Africa, we're in Honduras, we're in other countries, where we're growing, putting infrastructure of sprinkler systems to grow products. And just a big change is the people that now are within Hain that has helped myself put processes in place for just much better controls and managing our business. So if you come back and look at Hain today, we have -- and you saw some of the greatest brands, we really have great competent people within Hain. Our customer base and how we're spread out among our customer base and its retailers that are growing, not retailers that are closing stores, we're really in a good category in health and wellness. And we're in early innings of where the consumer continuously converse over. You talked about high single growth. If you look at conventional foods, it's growing 1%, 2%. And it's not that -- and I hear about it all today, well, what's the growth in the U.K. or what's the growth -- nobody out here, nobody in this room has stopped eating. It's just that we've moved over to eating different types of foods.

Gregory R. Badishkanian - Citigroup Inc, Research Division

Right. You mentioned some out of stocks, which United talked about, I believe. So which categories, which areas are really...

Irwin David Simon

Listen, this whole year, this past year, we have invested over $50 million in building out infrastructure within Hain. We built 2 new plants, we retrofitted 3. Throughout the year, we had a tremendous issue in getting pouches for baby food. Today, with the Earth's Best and Ella's acquisition, we'll buy close to 150 million pouches a year, and it really worked with suppliers on that. And again, we're looking for savings and cost savings. You're buying 150 million pouches a year, you're looking for $0.01 or $0.02 savings as tremendous savings there. And as we look to growers around the world, we can commit to certain volumes both on pouches. So number one was pouches was the original issue we had during the year. Arrowhead Mills, because of the growth was in grains and gluten-free, we had that out of stocks and how we've built our volumes up. Same thing with Arrowhead Mills, our DeBoles on our gluten-free pastas and how we've gone to other ships. Chia seeds, we were buying 10% of the world's supply of chia seeds and still couldn't keep up with demand. We've had major peanut butter suppliers go out of business and just keeping up with growth at MaraNatha with almond butters and cashew butters. So they have been some of the bigger issues for us. But we've really built infrastructure around them, and today, sourcing with Rob and his team in the U.K. And again, the big thing in sourcing within Hain today is we have some pretty strict guidelines on quality control. And if you expect to buy a product from Hain, you're expecting it's organic, it is true organic, we're GMO-free, there's no pesticides, and we have to live by those standards. And with that, we have some very strong, stringent controls in place as we source our products around the world. And we're out there third-party testing them, having affidavits. So we've got to make sure our supplies come in from the right place.

Gregory R. Badishkanian - Citigroup Inc, Research Division

Right, good. You seem pretty upbeat today so that's good to see.

Irwin David Simon

Business is always going to be better. Business is good. It is solid. And you've heard about UNFI and Whole Foods talking about good months in April and May. Sales have been -- April, May sales have been strong and continue. I like what I see happening in the U.K. and Rob and his team have really put some great things in place and really seeing a lot of benefits of it, which we started 18 months ago. The Canadian market continues to grow nicely. And Europe, even with all its challenges over there, Philippe and the team have really put some good things together. And then John and his team in the U.S., they are executing on all cylinders there. Excited about the BluePrint acquisition. And I think 3 years ago at a conference, I was introduced to juices with Greg, and I'm saying, "What is this?" The juicing category today is just caught on, unbelievable. BluePrint has been a phenomenal acquisition for us. And just like I said before, being direct-to-home, Whole Foods and being in a few other specialty stores, just keeping up with the demand of that has been a challenge for us. Really excited about Ella's. It seemed -- we bought Ella's and everybody wanted to buy a baby food company right after at higher values or higher multiples. We think infant feeding is a big opportunity, it's mom's or dad's first entry into organic. What Ella's does for us across the pond in Europe with Earth's Best in complementary, we've been asked to bring Earth's Best products and show them into the U.K. market into fresh categories. There's big opportunities to expand. Ella's is not Walmart, Ella's is not Babies and Toys "R" Us. So big opportunity to expand distributional here in the U.S., has more of a super premium product, a lot of innovation. So since last July, we did $400 million of acquisitions, so there's lot of opportunity with those acquisitions.

Gregory R. Badishkanian - Citigroup Inc, Research Division

Yes, good. On the cost side of things, has there been any sort of divergence with the conventional supply and commodity cost with organics? And is there anything on the cost side that maybe is shifting either to the upside or downside?

Irwin David Simon

The only thing we're seeing right now, Greg, almonds, which we talked about. I think some of that is supply and there is some weather and chia is one. We've got to continuously watch what dairy prices are. It's too early to tell. But the big challenge is going to be just supply, supply, supply. And as one of the largest procurers of organic fruits and vegetables, we've got to go out there and create supply and have farmers who ensure that they're going to have plenty of crop available for us.

Gregory R. Badishkanian - Citigroup Inc, Research Division

Right, good. Why don't we see if we have some questions here from investors? A lot of people, so...

Irwin David Simon

There's got to be a question out there.

Unknown Analyst

Can you just give us a sense of whether you're seeing any change in demographics and related behavior around customer spending trends over the past couple of years?

Irwin David Simon

Absolutely. As you heard me say before, some of our biggest growth today is coming from the mass market and that's the Walmarts, the Targets of the world. So eating healthy is not for just the 1%. It's growing across many different demographics within the U.S. And it's not that there's natural organic sections within their stores, but it's a consumer coming in and looking for that. So I come back and say it's growing across the total U.S. and not just the 1%, 2%. And you've heard Whole Foods talk about they're opening up stores in Omaha or they're opening up stores not just New York or California, how they're seeing tremendous performance in these stores and some of the smaller states and the demand for natural organic products.

Unknown Analyst

Irwin, in your top 15 U.S. brands, how many of those do you think are appropriate for the U.K. over time?

Irwin David Simon

So we really see some big opportunities. Greek Gods will go into the U.K., Gluten-Free Café, Celestial Seasonings. I think Terra Chips and Garden of Eatin' and Sensible Portions are big opportunity. We're doing some things with Earth's Best right now. We today have an approximately $4 million to $5 million Personal Care business in the U.K. I think there's some big opportunities with that. And then last but not least, we have about a $10 million nondairy business in the U.K. today that goes through a third-party distributor. I think there's a big opportunity with those.

Unknown Analyst

Would any of these products likely morph into a private label product, given the 50% that, that market represents if you take one of these brands and sort of jigger it up a bit?

Irwin David Simon

Well, it wouldn't be a private label. What we would look to do, do we take one of these brands and give it to a retailer on an exclusive basis where it will only be sold within that retailer. On the other hand, as you heard me say before, we built a new nondairy plant in Frankfurt. We'll have no problem doing private label nondairy products for Tesco, Sainsbury's, Waitrose or whoever wants them. But we're not going to do private label. And the other thing is just to come back, what I don't believe in is making products across the pond. You can't make money shipping products across the pond. These products will all have to be made in Europe or the U.K. So I will -- don't want to be a private label manufacturer if we can't do it within our own manufacturing facilities.

Unknown Analyst

And then also related to the U.K., if I look at the traditional business, what percentage of it do you think over the next 2 years is going to be reformulated, upgraded the way you've talked about in terms of formulation, et cetera?

Rob Burnett

I think that's a continuous process. I think you'll see every product that we launch will be healthier. So whether that be a traditional jam or marmalade category or whether that be some of the new stuff on kids or infant, it will also be healthier. And there's a pool as well from the retailers. The retailers are all under pressure from government to do a lot more for nutrition and health. And each of them have gotten their key strategies the next 3 to 5 years, bringing more health-related products, lower sodium, less fat, no trans fats, no palm oil. All these initiatives are being driven by the retailer as well as the consumer. So I think we'll be doing it continuously.

Irwin David Simon

Question at the back?

Unknown Analyst

What do you see is the consumer's willingness to pay for some of these higher-end items? I've been shocked that some of the prices of BluePrint [indiscernible] or some of those types of products on the shelf. And then secondly, how do you work with your retailers potentially to forecast and to make sure that your outlook cleared that product off the shelf as well?

Irwin David Simon

So the good news is even at the price BluePrint is today, it's clear and off-the-shelves. And I know you saw it not recently, there was even some trucks missing. But I think you come back and you look at this here, and a prime example is on consumption. Consumers will pay 10% to 15% more for good products, good quality products and good ingredients. But I don't sit here today and say, "Hey, we can just charge any price because it's natural, organic." And if we ever become that arrogant and got our heads in the air, then we'll learn the lesson pretty quickly. Consumers today are also price-sensitive. And one of the things we come back and look at, BluePrint, now part of Hain, there's a lot of productivity that's going on to get better pricing, better costing. And if we brought BluePrint price down by $1 or $2, are we going to see sales even double more? And I think so because it shows you how the consumer wants cold-pressed organic juice that's not pasteurized out there. Just stay tuned for that. But I think there's a 10% to 15% premium, and we can't go over that. And if there's an opportunity that we can bring product to parity on pricing, conventional, we'll continue to do that. Because on the other hand, you heard what I said before, 98% of our products are GMO-free. It's costing us more to go out and procure a GMO-free corn and GMO-free soybeans, but we were never getting the benefit. It was never this is a GMO-free product. At least, we're going to get the benefit that consumers are going to know. Same with organic, grown without pesticide. Same with antibiotic-free proteins, where you're not feeding antibiotics and you've got a mortality rate which isn't a lot higher. So I think the consumer and on a percentage basis, it's not that much. A mom introducing a baby to her first foods, organic baby food versus conventional, and they're paying $0.05 to $0.10 more are going to pay it. Our average price point out there today, and we'll take BluePrint out of the picture because that could throw it off a bit, is in the $3 to $4. On a Personal Care product, it's $7 to $8. So it's not you're buying expensive handbag or something like that. You're buying good quality products with good quality ingredients. And I saw just recently a mom buying our Earth's Best frozen pasta and she bought 4 of them. I said to her, "Why are you buying 4?" She was able to read off every ingredient in there and what the product stood for and how important the product was. On the other hand, what Hain has to maintain is good ingredients, good quality to get the consumer to pay the extra 10%, 15% premium for the price. And as we get bigger in scale, that's where I'd love to see us still get the parity and bring more and more consumers into the category.

Gregory R. Badishkanian - Citigroup Inc, Research Division

I think we're out of time. Irwin, very good, really appreciate your time.

Irwin David Simon

Thank you. Thank you, everybody.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.